The private sector recession is likely to be followed by a public sector downturn, with big cuts to services that can only be eased by a step change in efficiency, PwC warned on Monday.

The depth of the recession meant the gap between spending and the money the government was likely to raise on current plans would be far larger than the Treasury was predicting as recently as November, said John Hawksworth, head of macroeconomics at the professional services firm.